Chey Shinwon (73), former chairman of SK Networks, was sentenced to 2 years and 6 months in prison on the charges of embezzlement and breach of trust involving company funds amounting to over 220 billion won at the Supreme Court on the 15th. Chey is the second son of Chey Jong-gun, the founder of the SK Group, and is a cousin of Chey Tae-won, the chairman of SK Group.
The Supreme Court’s 3rd division (Chief Justice Oh Seok-jun) upheld the second trial ruling on the appeal regarding the charges against Chey, including violations of laws concerning aggravated punishment for specific economic crimes (embezzlement) on this day. Chey was sentenced to 2 years and 6 months in prison in the second trial and was detained in court.
Previously, Chey was arrested and indicted in March 2021 on charges of embezzling and breaching trust of company funds amounting to 223.5 billion won from six affiliates including SK Networks, SKC, and SK Telecom due to personal golf course business promotion, payment of false salaries to family and relatives, payment for hotel villa living expenses, payment of private capital increase funds, and support for struggling affiliates. He also faced allegations of exchanging foreign currency amounting to $1.4 million under a borrowed name and not declaring approximately $800,000 to customs for overseas transfer. Chey was released under a non-custodial status following his detention expiration (6 months) in September 2021 while the first trial was ongoing.
The first trial partly found Chey guilty of the charges and sentenced him to 2 years and 6 months in prison. The first trial court recognized approximately 58 billion won in embezzlement and breach of trust charges, as well as violations of the Financial Real Name Act and the Foreign Exchange Transaction Act, as guilty. The charges of fraud under the Specific Economic Crimes Act and violations of the Capital Markets Act were found not guilty. Both the prosecution and Chey’s side appealed the first trial ruling.
The second trial maintained the sentence from the first trial. However, the amount of Chey’s embezzlement and breach of trust recognized in the second trial reduced to approximately 56 billion won.
The second trial court found Chey guilty of various charges, including breach of trust for borrowing approximately 15.5 billion won from SK Telecom for promoting the golf course business, using about 28.1 billion won from SK Telecom’s funds for personal capital increase funds, spending over 12.8 billion won of company funds on false salaries to family and relatives, and hotel usage fees, as well as violations of the Foreign Exchange Transaction Act and the Financial Real Name Act.
However, it ruled that there was no breach of trust applied to Chey’s participation in the SKC’s capital increase involving approximately 90 billion won. The second trial court stated, “There is a risk of evidence destruction or flight,” leading to Chey’s detention in court.
Chey and the prosecution both appealed the second trial ruling. However, the Supreme Court saw no issues with the second trial’s ruling and upheld the sentence.
Meanwhile, Jo Dae-sik, former chairman of the SK SUPEX Council, who was also indicted, was acquitted on that day.
Jo, dubbed the ‘second-in-command’ of SK Group, is accused of having facilitated Chey’s investment of approximately 90 billion won in two rounds into the capital increase of SK Telecom, which was on the brink of bankruptcy. Both the first and second trials previously acquitted Jo.